APS - Approval of the Purchase of Generating Assets from PPL Sundance Energy, LLC

On June 1, 2004, Arizona Public Service Company ("APS" or "Company") filed a joint application with PPL Sundance Energy, LLC ("PPL Sundance") requesting ACC approval of APS' purchase of the Sundance Generating Station, and associated assets, from PPL Sundance.  The Sundance Generating Station is a 450-megawatt, natural gas-fired power plant in Pinal County, located near the town of Coolidge, approximately 55 miles south of Phoenix.  The joint application also requests a certificate of environmental compatibility authorizing the construction of a nominal 600-megawatt natural gas-fired, simple cycle, peaking power generating facility.   

RUCO filed a motion to intervene on June 10, 2004.  After conducting discovery to gain additional insight into the proposals contained in the Company's application, RUCO filed direct testimony on September 17, 2004.  Based on its analysis of the Company's application, RUCO has recommended that APS' request for a deferral accounting order be denied.   In support of this recommendation, RUCO's witness discussed normal ratemaking practices, exceptions to normal ratemaking practice, regulatory lag, and the provisions in the proposed APS settlement agreement regarding purchased power expense recoveries.  RUCO is also recommending that the Company's request for preapproval of the ratemaking treatment of the PPL purchase be denied, since it would constitute single issue ratemaking.   RUCO instead recommends that the assurance requested by APS can be adequately addressed with a Commission finding in this docket that APS is allowed to acquire the PPL plant and that the Commission will consider recovery of the associated costs in APS' next rate case under traditional cost-of-service principles.

The evidentiary hearing on this matter began as scheduled on Monday, October 4, 2004, at the Commission's Phoenix office at 1200 W. Washington and lasted two days.  After weighing the evidence presented during the proceeding, the Administrative Law Judge ("ALJ") who heard the case issued her recommended opinion and order ("ROO").

On January 11, 2005 the five Commissioners approved an amended ROO which, despite RUCO's arguments during the open meeting, allows APS to defer the costs associated with the operation of the plant for possible recovery in a future rate case proceeding.

Return to Prior Cases

Top of Page